The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1887-05-15
BANKS I'M" IDLE NOyEY."
AN EXPLANATION WORTHY IRE
ATrEN ION OF FISAsCIkRS.
The Marvellous Amount OF Clenr.
auces Effected UpOa b ink Cap
it'll aud Deposits.

seems to bo popular error to con,
slider money in the banks as ont OF
circulation and idle, Very frequent,
ly We observe writers en- monetary
questions Jumping together the idle
and unrepresented cash in the
United States Treasury and the
cash held by the banks, aad, deduct
ing the sum total from tn aggregate
supply OF mon, y in the country, call
ing the remainder the actual circula
ton of the country. This is a most
remarkable method of estimating the
money in actual use, where the i'm
pOrtance which the banks play in
commercial affairs must be apparent
to even the most careless observer.
The BIakerS Wcg'SiRe seems to drop
into this error ct assuming that
money in bank, more than that in in
dividual hands, becomes ur employed.
ltsays:
Tho 'Otal Of circulating money In the coun-
trV on Apri LIST iBclaNing money In q
Treasury, wss S,6l7 ,Sl6. 76l. OF 'his fetal
N,3 1891. 996 was reported No In tho hands OF
tut VtOpNts Inc lhlleI run IN ty nhNO TclTc=
sented the amount Of curreno eats do Of the
Trea'ury, anu approximately no dspbt IL
did. But wete tho 10 10 funds on that day to
10 deducted from tho amount so foHnd, IL
would probably appear that much less than
enc thousand millions was passing from
hand 10 hand, and hence peIior ssiuE thu
function OF q medium Oh change ItisEst
the mopsy lying Idle In banks or sthar pla css
for safe keeping that mousu os tho business
Of country, but tho amount msb lisod by
NWa1 L.. I. L.. a
termlne the artuhlsum Of currency In lies
lRtlOn on any particular dRy - tho year. 1t
can never be asosrtalnsd how mlsh Of what
mHy be on deposit at ANY point Is not liable
20 demand by checks and drafts In transit.
A9raft upos a dspe,it mob'lizes its face
hands.
IL is novel idea to estimate the
amount OF money in circulation by
taking only the money passing from
hand to hand on single day. 1t is
impossible to determine how much
work dollar does or legitimately
ought to do. The man who carries
a dollar in HE pocket for an hour re-
tires it from circulation Ter that
length of time, but it would not be
reasonable to count it IA among the
idle funds of the country. II he
drops that dollar into private drawer
OF his desk aud leaves il there for
year or five years, then tho factor of
boarding is introduced in the problem
of idle money,
But the mistake that tho Bdakcrs'
Mdgdzine makes is in the importance
it attempts to attach to money
lying idle in banks" 1t is in the
banks that idle money is least
known. 1t is the business of the
banks to keep money busy. You
might as well talk about idle looms
in mill in the sense that because
they are in the mill they are there
fore retired from employment. 1t is
the business Of the mill to keep the
looms going, it makes its profit by
doing it. The bank makes its profit
by keeping the money in its control
going, Except in very bad times
there is never moro than very
small proportion OF the money in the
banks idle. And there is no money
more actively employed than that
which the banks handle.
Take for instance the cleariGes of
the New York banks last week. They
amounted to over 1860, 600, willie
the total cash held by those banks
was only about $09,600,000. The to-
tai money in bank was turned over
nearly eight times in six working
days. Take, again, the branches OF
the banks in thirty five cities, repre-
senting only about 500 banks out OF
total of over 1000 in the country.
They amounted in April to nearly
n 5l3,000,000, while the total money
in the country outside OF the United
States Treasury is les, than 81 go
100000. That is, these 300 banks
turned over the total money in Circu-
alton three and ODo-halt times dur
ng the month of April. For the
year eaded October |, 1886, the |
Comptroller reports tho total clear
Ings of 507 banks in the country at |
1921 ,643,77l, or forty times as
much as the total circulation, while
inc DhlhDCeb pAlu III hCLual CaSn |
to SO, AGA 400 93i, or nearly
.hree times the total circulation.
1t is folly then to hunt for idle
in the banks. No part OF
our circulating medium is more ac-
lively employed than that which gets
INTO our banks. Those institutions
know best how to keep it employed
and their profits and even existence
depends upon giving money maxi
mum amount of work aud the mini
mum of idleness. IL is the careful,
suspicious individual who is afraid
IF banks or. hates them, and who
hides his money 10 old stockings,
1nder the ground, and in all sorts of
strange places, who has the idle
money" The bank which would en-
rage in that sort Of undertaking bust
ness would 5000 be sans money and
sans business.
A HreatBwIndIh0g scheme.